The morning news. [volume] (Savannah, Ga.) 1887-1900, 1887-05-17
FIVE MILLIONS IN BONDS.
HE CENTRAL'S NEW ISs
PLACED AT OF Ia.
ISSUE

The Loan Obtained on Securities in
Trust What Will Be Done with the
Money-$3, 900, 900 for the Goodwa-
ter Extension, 100000 to Pay Of
the Floating Debt. ana the Rest for
Banking Capital
The Central railroads recent issue of
s5,000,0O0 of ) per cent. fifty-year collateral
trust bonds has created something of a stir
in financial circles. The public has been
anxious to know what the company proposes
to do with the money. The bonds have
been placed, through Vice President Hollins.
with New York syndicate at 81 IL
President Alexander said yesterday that
the principal object in issuing the bonds is
TO secure money to complete the Goodwater
extension, to equip the road and to pay for
the plant and terminal facilities at Birming-
ham. Somewhere about s., 900, 900 is needed
for this purpose There is a floating debt of
S1,050,000, which was incurred in building
the South Carolina roads, upon which there
Is a yearly interest charge Of per cent.
TO PAY OFF THE FLOATING DEBT.
One million dollars will be used to pay off
this debt and the remaining 81 ,0000 600 will
be used for banking purposes. The COM
pany expects to save | per cent. on
100000 in paying off the floating debt,
which bears per cent. interest with 5 per
cent. loan.
The s., OO0, 900 to be used as banking capt.
tai will afford the company ample facilities,
which it very much needs, to carry on a
banking business.
THE GooDwATER EXTENSION.
81
Goodwater extension is considerably greater
than was anticipated by the former man.
agenent under which it was begun. The
plan contemplated by President Raoul was
to issue first and second mortgage on the
road, but this it was found would not fur
nish money enough to complete the extern
sion to Birmingham and secure terminal
facilities there. The country through
which the road runs is rocky and noun
famous, and even yet it is impossible TO
more than roughly estimate the cost of con-
stTuction.
PLAN OF THE LOAN.
In order to secure the money which the
company needed for this and for other pur-
poses President Alexander conceived the
plan of issuing collateral trust bonds put
ting up altogether about -, 800 900 in securi-
ties, including S2,000000 of Ocean Steam
ship Company stock and 5000, 900 Of Mont
geometry aliQ Euldula STOCK, lue DOnuS OF
the various roads composing the South
Carolina system, and also a part of the stock
Of the Eulaula and Clayton, West Point
Point and Atlanta and Western Alabama
roads.
SECURITIES IN TRUST.
These stocks are deposited with trust
company as security for the loan. The
bonds were placed with syndicate, which
VIII prevent their being put upon the
market
President Alexander considers the nego-
tiation "a very favorable one. 1t will
free the road from burdensome floating
debt and will furnish ample means to com
plete and equip the Goodwater extension,
which, when it is finished, will itself be en-
tirely free from debt, and will also enable
the company to build and equip a number
of other extensions which it has in view.
FOR BANKING PURPOSES.
4 Besides this it will put the company in
4 condition to carry on a paying banking
Abusiness. The Georgia Railroad Bank,
with limited capital, is do
4 inc fine business. and the
4SaYaunah bank, with capital of 81 900, 900,
1.-THE management believes will yield a re-
Hturh that will more than pay for the in
Svestment.
The issue of the new bonds has not at all
affected the value of the stock, which is
@quoted at 1874, where it has been for some
time